Vedanta to shut Lanjigarh refinery from today

Vedanta Aluminium Ltd (VAL), a unit of London-based Vedanta Resources, will shut its one-million-tonne (mt) alumina refinery from tomorrow. The company had issued a three-month advance notice in September to close the refinery from Wednesday, as it had no bauxite stock to run the plant beyond the deadline.

"The bauxite stock is zero. Despite our best efforts we could not secure bauxite supply for the plant. So we are forced to shut the refinery from tomorrow, according to the notice sent to the state government earlier", Mukesh Kumar, chief executive, VAL, told Business Standard.

"Whatever raw material resources we have, the three-member inter-ministerial group will decide on its supply to industries within three months", said steel & mines minister Rajani Kant Singh.

September 6, 2012: Vedanta Aluminium serves three-month notice to Odisha to close refinery by December 5.

Though stoppage of refinery will be official tomorrow, sources said the plant had already come to a halt due to want of bauxite. Before that the refinery was operating at only 25 per cent of its capacity for some time.

VAL's refinery was facing raw material problem since going onstream in August, 2007. The company had entered into a joint venture with Odisha Mining Corporation (OMC), which had a 78-mt bauxite deposit at Niyamgiri Hills near Lanjigarh, for the sourcing of ore. But mining could not be taken up due to protests by locals and green groups.

The Union ministry of environment and forest had further dealt a blow to the project by rejecting the Stage-II forest clearance for mining operations on August 24, 2010.

The closure of the refinery has put at stake the livelihood of 6,500 people, including 550 permanent employees and 5,000 engaged indirectly and 1,000 self-employed in and around the plant.

The state labour and employment secretary C T M Suguna said, "We have no role in the closure of the plant". She declined to discuss the fate of employees or their rehabilitation.

After being denied access to the Niyamgiri deposits, VAL was dependent on bauxite supplies from other states like Chhatisgarh, Jharkhand, Andhra Pradesh and Gujarat to keep its refinery operation afloat.

Climate fund Meanwhile, the forest and environment department of the Odisha government has asked Sterlite Energy, a Vedanta group company, to immediately deposit its contribution to Odisha Environment Management Fund (OEMF).

Earlier, the state energy department, in February this year, had asked the company to contribute to the fund, being managed by the forest and environment department.

The reminder to the company to deposit its contribution to the fund is seen as a counter offensive by the state government which had recently come under fire from Vedanta group for not paying Rs 744 crore dues for supply of power from SEL and the captive power plant of Vedanta Aluminium.